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--- version:First - Maryland Public Charter School Program - School Facilities - Funding+++ version:(document, no version)@@ -1,66 +1,260 @@-EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.- [Brackets] indicate matter deleted from existing law.- *hb1430*--HOUSE BILL 1430-F1 6lr3297- CF 6lr1517-By: Delegate Chang-Introduced and read first time: February 13, 2026-Assigned to: Appropriations--A BILL ENTITLED--AN ACT concerning 1--Maryland Public Charter School Program – School Facilities – Funding 2--FOR the purpose of requiring the Interagency Commission on School Construction to 3-distribute certain funds to public charter schools for the maintenance and operation 4-of public charter school facilities; and generally relating to the funding of public 5-charter school facilities in the Maryland Public Charter School Program. 6--BY adding to 7- Article – Education 8-Section 9–109(c) 9- Annotated Code of Maryland 10- (2022 Replacement Volume and 2025 Supplement) 11-- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 12-That the Laws of Maryland read as follows: 13--Article – Education 14--9–109. 15-- (C) (1) IN THIS SUBSECTION , “PUBLIC CHARTER SCHOO L FACILITIES ” 16-MEANS PREMISES THAT ARE: 17-- (I) OWNED OR LEASED BY A PUBLIC CHARTER SCHOOL; OR 18-- (II) OCCUPIED AND UTILIZED BY A PUBLIC CHARTER SCHOOL 19-TO PROVIDE A PROGRAM OF PRIMARY OR SECOND ARY EDUCATION TO ITS 20-STUDENTS. 21-- (2) (I) THE INTERAGENCY COMMISSION ON SCHOOL 22-2 HOUSE BILL 1430--CONSTRUCTION SHALL DISTRIBUTE FUNDS TO PUBLIC CHARTER SCHOOLS FOR THE 1-MAINTENANCE AND OPERATION OF PUBLIC CHARTER SCHOOL FACILITIES. 2-- (II) FUNDS DISBURSED UNDER SUBPARAGRAPH (I) OF THIS 3-PARAGRAPH SHALL BE PAID DIRECTLY TO THE PUBLIC CHARTER SCHOOL AND MAY 4-NOT BE PAID TO A LOCAL GOVERNING BODY OR COUNTY BOARD. 5-- (3) FOR FISCAL YEAR 2028 AND EACH FISCAL YEAR THEREAFTER, 6-THE GOVERNOR SHALL INCLUDE IN THE ANNUAL BUDGET BILL AN APPROPRIATION 7-FOR THE MAINTENANCE AND OPERATION OF PUBLIC CHARTER SCHOOL FACILITIES 8-THAT IS EQ UAL TO THE TOTAL AGG REGATE STUDENT ENROL LMENT IN THE 9-MARYLAND PUBLIC CHARTER SCHOOL PROGRAM FOR THE PRIOR FISCAL YEAR 10-MULTIPLIED BY $1,600. 11-- (4) THE INTERAGENCY COMMISSION ON SCHOOL CONSTRUCTION 12-SHALL ADOPT REGULATIONS TO CARRY OUT THIS SUBSECTION. 13-- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 14-1, 2026. 15+ HB 1430+Department of Legislative Services+Maryland General Assembly+2026 Session++FISCAL AND POLICY NOTE+Enrolled - Revised+House Bill 1430 (Delegates Chang and Stonko)+Appropriations Budget and Taxation++Maryland Public Charter School Program - School Facilities - Funding++This bill requires the Interagency Commission on School Construction (IAC) to distribute+funds directly to public charter schools for capital improvements, debt service, or rent or+lease payments. To receive funds, a public charter school must not concurre ntly receive+funds under the Public School Construction Program (PSCP) and the operator’s most+recent audit must be unqualified. Continued funding is contingent on a reporting+requirement. IAC may not reduce local school system PSCP allocations because of the+bill’s funding. Beginning in fiscal 2028, the bill requires the Governor to include an+appropriation in the annual budget bill for specified charter school facilities purposes that+is equal to the total aggregate student enrollment in the Maryland Publ ic Charter School+Program for the prior fiscal year multiplied by $ 200. If funding for PSCP is reduced+year-over-year, funds distributed under the bill must proportionally decline. The IAC must+adopt regulations to carry out the bill, as specified. The bill takes effect July 1, 2026.++Fiscal Summary++State Effect: Under one set of assumptions , general fund expenditures for IAC increase+by $116,800 in FY 2027 for staff, and by an additional $5.0 million beginning FY 2028 in+accordance with the bill’s mandated appropriation. Out years reflect annualization,+inflation, and assumed enrollment growth in charter schools. Federal fund revenues+potentially increase a significant amount to the extent the program allows the State to apply+for and receive competitive federal grant funding. This bill establishes a mandated+appropriation beginning in FY 2028.++($ in millions) FY 2027 FY 2028 FY 2029 FY 2030 FY 2031+Revenues $0 $0 $0 $0 $0+GF Expenditure 0.1 5.2 5.2 5.3 5.3+Net Effect ($0.1) ($5.2) ($5.2) ($5.3) ($5.3)+Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease++HB 1430/ Page 2+Local Effect: None. The bill requires funds to be paid directly to charter schools.+However, additional funding available for charter school facilities may encourage+additional local school systems to lease facilities to charter schools.++Small Business Effect: Minimal.++Analysis++Bill Summary: “Public charter school facilities” are premises that are owned or leased by+a public charter school or occupied and utilized by a public charter school, as specified.+Funds must be disbursed directly to public charter schools and may not be paid to local+governing bodies or local boards of education. If a public charter school is located in a+building owned by the local school system and receives PSCP funding in a given+fiscal year, IAC may not distribute funds under the bill to that public charter school in that+same fiscal year. A public charter school may receive funds only if the operator’s most+recent required certified financial audit is unqualified.++Regulations++IAC must adopt regulations to carry out the bill that (1) establish proce dures to comply+with the prohibition on receipt of funds for public charter schools that receive PSCP+funding in the event of mid ‑year capital project funding requests and (2) ensur e a public+charter school receives funds if the local school system rescind s a capital project funding+request and the public charter school is subsequently eligible for funding under the bill.++Reporting++In the fiscal year following receipt of funds, public charter schools must report to IAC on+the status of any project for cap ital improvements, debt service, or rent or lease payments+before the public charter school may receive funds for the following fiscal year.++Funding Distribution Cap++If the total amount of funding for PSCP in a fiscal year is less than the total amount i n the+prior fiscal year, the amount of funds distributed to public charter schools under the bill for+the fiscal year must be proportionately reduced.++HB 1430/ Page 3+Current Law:++Public Charter Schools++The general purpose of the Maryland Public Charter School Program is to establish an+alternative means within the existing public school system in order to provide innovative+learning opportunities and creative educational approaches to improve the education of+students. A local board of education must disburse to a public charter school an amount of+county, State, and federal money for elementary, middle, and high school students that is+commensurate with the amount disbursed to other public schools in the local jurisdiction.++The local board of education is the public c hartering authority within a county. Public+charter schools must be nonsectarian and, with exceptions, open to all students on a+space‑available basis and admit students on a lottery basis if more students apply than can+be accommodated. If granted a waive r, a public charter school located within a federal+military base may designate as much as 65% of its enrollment for students whose parents+are assigned to the base.++Public charter schools cannot discriminate in their enrollment policies or charge tuition to+students. A local school system must serve students with disabilities attending public+charter schools in the same manner as the public agency serves students with disabilities+in its other schools, in accordance with applicable federal and State law. A public charter+school must require students to be physically present on school premises for a period of+time substantially similar to that which other public school students spend on school+premises.++An application to establish a public charter school may be submitted to a local board by+the staff of a public school, a parent of a student who attends a public school in the county,+a nonsectarian nonprofit entity, a nonsectarian institution of higher education in the State,+or any combination of these. A public chartering authority may not grant a charter to a+private school, a parochial school, a home school, or a school that operates fully online.++Each local board of education must develop a public charter school policy and provide it+to the State Board of Education, including guidelines and procedures regarding evaluation+of public charter schools, revocation of a charter, reporting requirements, and financial,+programmatic, or compliance audits of public charter schools.++IAC advises that some charter schools are eligible for capital construction and systemic+renovation funding from PSCP. However, funding is available only for facilities that are+owned by local school systems (and leased to the charter school) or otherwise leased by a+charter for a per iod of at least 25 years. Funding requests must be submitted by the local+school system in which the charter school is located.++HB 1430/ Page 4+Charter School Facilities++In general, public charter schools have right of first refusal for any land, school site, or+building that is no longer needed by a local school system and county government.+Specifically, if a local school board finds, with the approval of the State Superintendent or+the State Superintendent’s designee , that any land, school site, or building is no longe r+needed for school purposes, it must inform the county commissioners or county council of+that determination. Within 30 days of receiving the notice from the local school board, the+county government must notify the local school board either (1) of the need to transfer the+land, site, or building to the county if it is an integral part of an existing economic+development plan that will significantly benefit the county or (2) that the+county government has no existing plans for the land, site, or building. If the county+government has no plans for the property or does not provide notification within 30 days,+the local school board must make the property available to any charter school in the district,+under terms established by the local school board.++Funding for Charter School Facilities in the State Operating and Capital Budgets++Public schools, including charter schools , are authorized to use Foundation Formula+funding for maintenance and operation of the school.++Until May 2023, only public charter schools in buildings owned by a local school system+were eligible for capital construction and systemic renovation funding from the PSCP. In+order to receive funding from the PSCP, a local school system in which the charter school+is located must submit a funding request. The request then requires the local school system+to assume the local share of the State and local cost-share formula for the PSCP.++In 2023, IAC adopted a policy to allow the use of bond proceeds for capital improvements+in leased public school buildings not owned by a local school system, provided that the+lease is a minimum of 25 years in duration and, for charter schools, subject to a written+guarantee by the local school system that granted the charter. The new IAC policy does not+allow State bond proceeds to be used for rent payments, utility costs, or salaries. The+fiscal 2025 capital improvement plan was the first to allow submission of projects under+this new policy.++Public charter schools are eligible for, and occasionally receive, direct funding through the+State’s capital program. For instance, i n the fiscal 2026 capital budget as enacted+(Chapter 603 of 2025), two public charter schools received State funding totaling+$1.6 million. Funding from the capital program can only be used for expenses described as+eligible in the authorization, and funding does not require any local school system or public+charter school matching funding.++HB 1430/ Page 5+State Fiscal Effect:++Mandated Appropriation++MSDE advises that, for the 2025 -2026 school year, there are 49 charter schools serving+24,904 students . Assuming a 1% annual growth rate in the number of charter school+students, an estimated 25,153 charter students in the 2026 ‑2027 school year require+$5.0 million in general fund appropriations beginning in fiscal 2028 to meet the bill’s+mandate. Out-years reflect an assumed 1% annual growth rate for charter school enrollment+and level funding at $ 200 per pupil. To the extent enrollment in public charter schools+differs from these assumptions, the mandated appropriation also differs.++This analysis assumes PSCP funding levels do not decline year -over-year for the+foreseeable future, such that expenditures for public charter school facilities under the bill+are maintained at the le vel of the mandated appropriation described above. To the extent+PSCP funding is reduced, funding that must be distributed under the bill is proportionately+reduced. This cap on distributions, however, does not alter the bill’s mandated+appropriation amount, which would remain at $200 per pupil. Therefore, while funding+distributed by IAC may decline proportionately, the amount that the Governor must include+in the annual budget bill remains at $200 per pupil. Any funds not distributed by IAC in a+fiscal year in accordance with the bill’s funding cap are assumed to revert to the general+fund at the end of the fiscal year. Alternatively, the legislature may take action to adjust+the mandated funding level and appropriation for public charter school facilities to account+for declining PSCP allocations in a given fiscal year.++Administrative Costs++The bill does not specify how the mandated funding is to be distributed to public charter+schools. Thus, IAC must determine how the funds are to be distributed and establish+policies and procedures, including potentially developing an application process and form.+IAC must also establish procedures to ensure nonpublic charter schools are in compliance+with the bill’s audit and reporting requirements. To accomplish th is, staff is needed in+fiscal 2027, before the funding becomes available in fiscal 2028.++Therefore, general fund expenditures for IAC increase by $116,835 in fiscal 2027, which+accounts for a 90 -day start -up delay from the bill’s July 1, 2026 effective da te. This+estimate reflects the cost of hiring one program manager to establish a grantmaking process+in fiscal 2027 to disburse mandated funding to charter schools directly beginning+fiscal 2028, and to administer the grant program thereafter . It includes a salary, fringe+benefits, one-time start-up costs, and ongoing operating expenses.++HB 1430/ Page 6+Position 1.0+Salaries and Fringe Benefits $107,694+Operating Expenses 9,141+Total FY 2027 IAC Expenditures $116,835++Future year expenditures reflect full salaries with annual increases and employee turnover+as well as annual increases in ongoing operating expenses.++Potential Competitive Federal Grant Revenues++By providing State per-pupil funding for charter school facilities under the bill, the State+may become eligible for discretionary federal grant support. MSDE advises that the+U.S. Department of Education Charter Schools Program includes a State Charter Schools+Facilities Incentive Grants to help states establish or administer “per -pupil facilities aid”+for charter schools. The program is designed to encourage states to share in the costs+associated with charter school facilities funding with local/non -federal matching+requirements increasing from 10% in year one of a grant to 80% in year five. MSDE+advises that the competitive grant has not historically been offered every year, but grants+were awarded in both 2024 and 2025. In federal fiscal 2025, the program awarded+$57.0 million in new and continuation grant awards under the program.++Additional Comments: IAC advises that some of the improvements made to+charter school facilities with the mandated appropriations may outlast the charters of+schools eligible for funding under the bill. As the bill does not contain provisions to require+public school charters to be in place for a minimum amount of time or any restrictions on+the sale or lease of charter school buildings that may be funded with State dollars, the bill+may result in a loss of State funds on facilities not owned by local school districts.++Additional Information++Recent Prior Introductions: Similar legislation has not been introduced within the last+three years.++Designated Cross File: SB 960 (Senators Rosapepe and Ready) - Budget and Taxation.++Information Source(s): Interagency Commission on School Construction; Maryland+State Department of Education; Department of Legislative Services++HB 1430/ Page 7+Fiscal Note History: First Reader - March 9, 2026+Third Reader - March 30, 2026+ Revised - Amendment(s) - March 30, 2026+ Revised - Updated Information - April 1, 2026+Enrolled - May 4, 2026+ Revised - Amendment(s) - May 4, 2026++jg/mcr++Analysis by: Michael E. Sousane Direct Inquiries to:+(410) 946-5510+(301) 970-5510
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